Tax Credit Programs
Federal Low-Income Housing Tax
Credit (LIHTC) Program
Overview
The Connecticut Housing Finance Authority (CHFA)
administers the federal Low-Income Housing Tax Credit
(LIHTC) program for housing developments in the state of
Connecticut. The LIHTC program is contained within § 42 of
the
Internal Revenue Code
(26 U.S.C. § 42) as a tax incentive program to
stimulate investment in affordable housing.
The LIHTC program provides incentives for developers to
acquire, rehabilitate and/or build low- or mixed-income
housing through the allocation of federal tax credits that
may be sold to corporations or investor groups to raise
equity for a project. The credits represent a
dollar-for-dollar reduction in tax liability and often are
purchased at a discount.
In Connecticut, the LIHTC program plays a vital role in
the creation and preservation of affordable rental housing
by increasing the funding available to eligible projects
that best meet the state's goals and requirements for
affordable housing. (See,
Qualified Allocation Plan.)
Follow the links below
to learn more about the LIHTC program.
|
|
Who can apply for Low-Income
Housing Tax Credits?
Developers and owners of qualified low-income housing may
apply for Low-Income Housing Tax Credits.
Successful applicants:
- acquire, substantially rehabilitate, and/or
construct residential rental developments that provide a
percentage of affordable units for occupancy by
low-income individuals and families.
- assemble a development team (owner, development
consultant, management agent, contractor and architect)
that meets the experience and licensing requirements
established by CHFA.
- comply with
Section 42
of the Internal Revenue Code, regulations,
administrative documents, and all relevant material
published by the IRS.
Please note: Before applying, developers
are encouraged to seek the assistance of a housing
consultant, an attorney and/or an accountant to verify
compliance with all LIHTC program requirements.
What types of housing
developments are eligible to receive Low-Income Housing Tax
Credits?
In order to be eligible to receive Low-Income Housing Tax
Credits (LIHTC), housing developments must meet specific
criteria set forth in
Qualified Allocation Plan (QAP).
- Eligible developments must provide
residential low-income rental housing.
Projects that acquire, substantially rehabilitate, and/or
construct residential rental housing to be occupied by a
percentage of low-income individuals and families may be
eligible to receive LIHTC awards.
Conversely, hospitals, sanitariums, nursing homes,
retirement homes, mobile home parks, and life care
facilities (excluding certain Assisted Living proposals)
are not eligible for LIHTC.
- Projects must meet "Minimum
Set-aside" requirements
A "minimum set-aside" represents the lowest percentage
of a development's housing units that meet
HUD-defined low-income and rent restrictions
applicable to the geographic areas.
In order to be eligible for LIHTC, development owners
must agree to one of two “minimum set-aside” provisions.
- LIHTC 20-50 Minimum Set-asides - Very Low Income
Tenants
At least
20% of the development's units must be rented to
tenants earning no more than 50% of the
area median
income (adjusted for family size) as established by HUD.
The remaining units
may be rented at market rates.
-
LIHTC 40-60 Minimum Set-asides
At least 40% of the development's units must be rented
to tenants earning no more than
60% of the area median income
(adjusted for family
size) as established by HUD. The remaining units may be
rented at market rates.
This set-aside requirement remains in place throughout
the compliance period of 15 years and an extended use
period, which typically totals over 30 years.
What size tax credit is a
development eligible to receive?
The amount of tax credits a development is eligible
to receive under the Low-Income Housing Tax Credit
(LIHTC) program represents a fixed percentage of certain
costs of developing low-income housing and the number of
units that will meet federal rent and income targeting
guidelines. Other factors that are considered include,
but are not limited to, the amount and source of
financing available for a project.
Generally, new construction projects and substantial
rehabilitation projects may qualify for 9% Tax Credits, as
long as they are not funded with federal Tax-Exempt Bonds
and are otherwise eligible. On the other hand, projects
that involve acquisition and substantial rehabilitation
expenditures and are funded with Tax-Exempt Bonds may only
qualify for 4% Tax Credits.
A development receives all of the tax credit equity
during the construction period, while investors claim the
tax credits annually over a ten year period. The credits
are used to reduce federal tax liability on a dollar-for-dollar basis.
How do Developers apply for Low-Income
Housing Tax Credits?
Developers may apply for Low-Income Housing Tax
Credits by delivering a completed copy of the
Consolidated Application
to the Connecticut Housing Finance Authority.
What is the application
deadline for Low-Income Housing Tax Credits?
The application deadline differs depending upon the type
of LIHTC being applied for:
- 9% Low-Income Housing Tax
Credits
There is a limited pool of 9% LIHTC. This
means that developers must apply during
CHFA-specified 9% LIHTC funding rounds and
be rated and ranked based upon how well
their projects meet the priorities and
selection criteria set forth in CHFA's
Qualified
Allocation Plan (QAP.) The top scoring
applicants (as judged by CHFA) are awarded
9% LIHTC.
To be included in the 2012 funding round,
all application packages must be received by
CHFA October 1, 2012 no later than 4:00pm.
- 4% Low-Income Housing Tax
Credits
4% LIHTC are allocated on a
non-competitive basis to
developments that utilize Tax-Exempt Bonds
as a component of their financing. Because
4% LIHTC are awarded on a non-competitive
basis, developers may apply for 4% LIHTC at
any time. Common practice is for developers
to apply for 4% LIHTC in conjunction with
Tax-Exempt Bond financing.
(See Also,
News and Announcements for "Notice of
Funding Availability" bulletins advertising
periodic Tax-Exempt Bond financing
opportunities.)
Is training available on the Low-Income Housing Tax Credit
program?
Generally, CHFA offers LIHTC
application overview sessions providing
information regarding the LIHTC Program
and Qualified Allocation Plan updates.
Prior to the funding round each year, overview sessions will be
posted under
News and
Announcements for Developers and Sponsors. Developers
interested in receiving email updates regarding the LIHTC
Program should contact
margaret.swiconek@chfa.org to be added to our email list.
What else
should developers know about
Low-Income Housing Tax Credits?
The following additional considerations and restrictions
apply to the LIHTC Program.
- Developments receiving Tax-Exempt Bond
financing may still be eligible for federal Tax
Credits.
Developments that receive Tax-Exempt Bond financing
from local, state or federal governments may still
qualify for 4 % LIHTC awards.
- A single development can qualify for
both 9% and 4% Tax Credits.
If a development includes building acquisition, it
may be eligible for 4% acquisition tax credits in
addition to 9% tax credits for rehabilitation
expenditures.
- Eligible developments must make a
minimum long-term commitment to provide low-income
housing.
LIHTC requires that a development provide
low income housing for a compliance period of 15
years starting with the first year of a building’s
ten-year credit period.
- Tax Credits allocated to developments
must not exceed the amount necessary to assure the
development’s feasibility.
The housing credit dollar amount allocated to a
building that is a part of a qualified low-income
housing project must not exceed the amount CHFA
determines is necessary for the financial
feasibility of the development throughout the
compliance period.
- The Tax Credit Period begins when a
building is placed in service or the next year.
Under LIHTC, the credit period of ten taxable years
for any building that is a part of a qualified
low-income development begins on the taxable year in
which the building is placed in service, or the
succeeding taxable year if the taxpayer chooses.
- Ten percent of all 9% Tax Credits are
reserved for non-profits.
Under LIHTC, ten percent of the tax credits
available in Connecticut are reserved exclusively
for developments sponsored by non-profit
organizations. Applicants under the non-profit
set-aside will be rated and ranked only against
other non-profit applicants.
Questions?
Contact CHFA.
Please direct questions and comments related to tax
credit programs to the Tax Credit Department.
Mailing Address:
Connecticut Housing Finance Authority
Attn: Multi Family Underwriting
999 West Street
Rocky Hill, Connecticut 06067
|
|
|
|
Additional
Information
The following files and documents are related to the
Federal Low-Income Housing Tax Credit Program
| Related Documents |
Found: 19
matches
Displaying:
1
- 19 |
|
 |
| File | Size | Type | CHFA-DECD Consolidated Application Instructions
Downloading/Unzipping Instructions - These files contain instructions on how to save, unzip, and open the Consolidated Application. Users who are unfamiliar with the concepts of "zipping" and "unzipping" files should read this document pior to downloading the Consolidated Application. | 53K | pdf |
| CHFA-DECD Consolidated Application Version 5.1
Released March, 2013, The Connecticut Housing Finance Authority (CHFA) and the Department of Economic and Community Development (DECD) announce the release of the 2013 CHFA-DECD Consolidated Application Version 5.1. Download this file and extract its contents onto your computer. Once extracted, open the "Consolidated Application - Start Here" pdf file. (PLEASE NOTE: This file is stored in "Zip" format. Older versions of Windows may need a separate utility to open/extract zip files. WinZip or IZArc can be downloaded free at http://izarc.org.) | 10889K | zip |
| 2013 - Standards of Design and Construction
The Standards of Design and Construction reflect national and regional residential "Green" rating criteria, augments current applicable Building Code requirements, and sets forth design and construction standards and guidelines for multifamily housing financed or administered by CHFA through 2013 | 1971K | pdf |
| 2013 Draft QAP for Public Hearing
May 6, 2013. This is the draft 2013 Qualified Allocation Plan (QAP) for Connecticut as required by the federal Low-Income Housing Tax Credit ("LIHTC") Program for the allocations of housing tax credits. | 673K | pdf |
| CEFIA Webinar February 28, 2013
This is the Flyer for the Webinar on How to Drive Energy Efficiency and Clean, renewable Energy Upgrades using Connecticut's new C-PACE Program. | 129K | pdf |
| Energy Efficiency Effectiveness Form
This form is for development team use in submitting energy conservation data for financing applications. | 23K | xlsx |
| LIHTC - 2011 Application Overview
This is the LIHTC Application Overview presentation used for the sessions held on February 7th and February 10th, 2011. | 2731K | ppt |
| LIHTC - 2011 Qualified Allocation Plan
Updated August 2011. This is the Qualified Allocation Plan (QAP) for Connecticut as required by the federal Low-Income
Housing Tax Credit ("LIHTC") Program for the allocations of housing tax credits to promote an expansion of low-to moderate income rental housing in the state by establishing the guidelines and procedures for the acceptance, scoring and competitive ranking of LIHTC applications and the administration of the program. | 6819K | pdf |
| LIHTC - 2012 LIHTC 9% Applicant List
2012 LIHTC Applicant List - This chart lists the developments which applied for 2012 9% Federal Low-Income Housing Tax Credits | 27K | pdf |
| LIHTC - 2012 LIHTC Award List - 9%
2012 Application Round LIHTC Award List - This chart lists the developments which were approved for 9% Federal Low-Income Housing Tax Credit Awards on March 28, 2013. | 29K | pdf |
| LIHTC - 2012 Qualified Allocation Plan
On June 28, 2012, Governor Malloy approved the CHFA 2012 Qualified Allocation Plan (QAP).
2012 Applications for 9% Low-Income Housing Tax Credits will be due by 4:00 p.m. on Monday, October 1, 2012.
Please note the change in the date applications are due.
| 1046K | pdf |
| LIHTC - Appendix 2: General Information
Introduction to Low-income Housing Tax Credit Program | 69K | pdf |
| LIHTC – Cost Certification Submission Form
The LIHTC Cost Certification determines the amount of recognized eligible basis and also determines whether the initial tax credit allocation amount still qualifies for a housing project. | 94K | doc |
| LIHTC - Glossary of Terms
This is a glossary of terms related to the Low Income Housing Tax Credit (LIHTC) Program. | 108K | pdf |
| State Bond Commission - Multifamily Rental Housing Underwriting Review Guidelines for Mortgage Loans
This document is applicable to all entities seeking an allocation of Private Activity Bonds ("PAB") from the Office of Policy and Management ("OPM"). OPM refers to the Connecticut Housing Finance Authority ("CHFA") for review of development proposals with the below guidelines | 61K | pdf |
| VLI - Section 3 Summary Report - Economic Opportunities for Low and Very Low-Income Persons
Submit one (1) copy of this report to the HUD Headquarters Office of Fair Housing and Equal Opportunity, at the same time the performance report is submitted to the program office. The Section 3 report is submitted by January 10. Include only contracts executed during the period specified in item 8. PHA/s/IHAs are to report all contracts/subcontracts. | 158K | rtf |
| VLI - Very Low Income (VLI) Construction Status Report
This form is to be used to report accomplishments regarding employment and other economic opportunities provided to low and very low-income persons and must accompany each monthly request for Construction Advance. | 52K | xls |
| VLI - Very Low Income Construction Employment - Policy Statement
This form is to be used to report accomplishments regarding employment and other economic opportunities provided to low and very low-income persons and must accompany each monthly request for Construction Advance. The information will be used to monitor compliance with the VLI Construction Employment Policy established by Connecticut Housing Finance Authority ("CHFA"). This form applies to projects funded by CHFA multifamily mortgages and/or Low-Income Housing Tax Credits ("LIHTCs") that have $1 million or more in "Hard Construction Cost". For the purposes of this form, VLI means families (including individuals) whose incomes do not exceed 50 percent of the Area Median Income of the location of the development.
| 245K | pdf |
| Waiver of Lien
Replacement of Waiver of Lien form (01/08), into selection of two separate forms, one for General Construction and other for Construction Change Order. | 132K | pdf | | File | Size | Type |
|
|
Found: 19
matches
Displaying:
1
- 19 | |
|